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Thermo Fisher Scientific Inc (NYSE:TMO)
Beneish M-Score
-2.23 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Thermo Fisher Scientific Inc has a M-score of -2.23 suggests that the company is not a manipulator.

TMO' s 10-Year Beneish M-Score Range
Min: -2.96   Max: -0.55
Current: -2.23

-2.96
-0.55

During the past 13 years, the highest Beneish M-Score of Thermo Fisher Scientific Inc was -0.55. The lowest was -2.96. And the median was -2.46.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Thermo Fisher Scientific Inc for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 1.2966+0.528 * 1.0032+0.404 * 1.0487+0.892 * 1.0916+0.115 * 1.1978
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0344+4.679 * -0.0058-0.327 * 1.3551
=-2.23

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $2,696 Mil.
Revenue was 3903.5 + 3466.9 + 3191.8 + 3240.1 = $13,802 Mil.
Gross Profit was 1620 + 1481.7 + 1347.9 + 1363.2 = $5,813 Mil.
Total Current Assets was $7,306 Mil.
Total Assets was $46,134 Mil.
Property, Plant and Equipment(Net PPE) was $2,489 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,115 Mil.
Selling, General & Admin. Expense(SGA) was $3,794 Mil.
Total Current Liabilities was $5,392 Mil.
Long-Term Debt was $15,197 Mil.
Net Income was 543.1 + 342.1 + 317.6 + 277.4 = $1,480 Mil.
Non Operating Income was 4.8 + -15 + -15.9 + -38.1 = $-64 Mil.
Cash Flow from Operations was 101.2 + 728.5 + 505.5 + 478.4 = $1,814 Mil.
Accounts Receivable was $1,905 Mil.
Revenue was 3191.5 + 3259.3 + 3085.7 + 3108.1 = $12,645 Mil.
Gross Profit was 1336.3 + 1386.1 + 1298.4 + 1321.3 = $5,342 Mil.
Total Current Assets was $5,136 Mil.
Total Assets was $27,411 Mil.
Property, Plant and Equipment(Net PPE) was $1,686 Mil.
Depreciation, Depletion and Amortization(DDA) was $992 Mil.
Selling, General & Admin. Expense(SGA) was $3,360 Mil.
Total Current Liabilities was $2,303 Mil.
Long-Term Debt was $6,724 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(2695.5 / 13802.3) / (1904.5 / 12644.6)
=0.19529354 / 0.15061765
=1.2966

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(1481.7 / 12644.6) / (1620 / 13802.3)
=0.42248074 / 0.4211472
=1.0032

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (7306.1 + 2488.7) / 46133.7) / (1 - (5136.1 + 1685.8) / 27410.7)
=0.78768666 / 0.75112274
=1.0487

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=13802.3 / 12644.6
=1.0916

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(992.2 / (992.2 + 1685.8)) / (1114.5 / (1114.5 + 2488.7))
=0.37050037 / 0.30930839
=1.1978

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(3793.8 / 13802.3) / (3360.1 / 12644.6)
=0.27486723 / 0.26573399
=1.0344

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((15196.9 + 5391.5) / 46133.7) / ((6724.4 + 2302.8) / 27410.7)
=0.4462768 / 0.32933125
=1.3551

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(1480.2 - -64.2 - 1813.6) / 46133.7
=-0.0058

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Thermo Fisher Scientific Inc has a M-score of -2.23 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Thermo Fisher Scientific Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.96350.99951.72650.4050.94640.990311.09440.94561.0284
GMI 1.00741.01331.09741.05950.97421.00640.97920.98020.97981.0022
AQI 1.00431.19261.2490.99820.95580.99371.01891.02381.00090.8338
SGI 1.16141.19361.442.57051.07710.9631.04561.09351.08231.0464
DEPI 0.7730.66241.89810.43010.97541.03251.04811.01810.95841.0046
SGAI 1.03861.01881.0120.89320.98061.02940.98411.03450.99790.9817
LVGI 0.83411.31740.68750.91340.90881.01291.02271.8861.0061.1918
TATA 0.0206-0.0201-0.0113-0.0341-0.0208-0.0365-0.0203-0.0146-0.0315-0.0214
M-score -2.25-2.46-1.12-1.77-2.56-2.70-2.54-2.67-2.62-2.64

Thermo Fisher Scientific Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 1.09071.08170.96020.9190.94870.94861.00571.01861.02841.2966
GMI 0.98270.98010.97110.97530.97730.98530.99851.00051.00221.0032
AQI 1.02381.12351.04490.99451.00090.98820.96390.94720.83381.0487
SGI 1.09721.11891.11571.09911.07871.05961.04841.0441.04641.0916
DEPI 1.01810.97540.88870.89250.95840.9591.00650.99531.00461.1978
SGAI 1.03261.04621.0321.01340.99980.98280.98460.98120.98171.0344
LVGI 1.8861.26271.32451.05041.0061.02761.02580.93571.19181.3551
TATA -0.0146-0.0157-0.032-0.0342-0.0315-0.0264-0.0222-0.0211-0.0214-0.0058
M-score -2.67-2.43-2.68-2.67-2.62-2.62-2.56-2.52-2.64-2.23
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